Everyone wants to get paid more, and that includes businesses. However, while employees get paid more by negotiating a raise, an employer gets paid more by not giving it to them. That makes advocating for pay increases a zero-sum game. This also means that if you want more money for your team then you have to ask for it, or actually more like demand it. Unfortunately, many people are lacking in negotiating skills and fear confrontation so much that they never get to this point, and they just continue working for less than they are worth.
As a software engineering manager, it’s your job to stand up for your team, but if you feel a little intimidated when approaching the higher-ups for raises, don’t feel too bad. Negotiating is tough, but it is a skill that you can learn, and it gets even easier when you can be confident in the fact that you have real numbers to back up your demands. Here’s how to create a solid plan that can get your team what they need.
Know your team’s true value
You can bet that your employer has fully researched exactly how much your team’s labor is worth. They are not ignorant of the fact that they should be paying them more, in fact, they’re probably hoping that you don’t figure it out. Fortunately, these days it’s easier than ever to begin gathering data for your mission and then turning that knowledge into a formidable argument that can win your team better compensation.
More than 60% of tech workers actually believe that they are underpaid. In a highly skilled industry like software engineering, you can’t afford for your team members to jump ship just for a raise.
So, your first step is to research the average salaries that other software engineering teams are earning, and don’t forget to account for any special skills your team brings to the table. Software engineering is a wide and varied field, and if your team has a specialty skill set that’s in demand, then your pay rate should reflect that.
Doing your homework also comes with the benefit of earning respect from your management team. If you truly know your stuff, then they’ll see that you’re serious about your demands. Being able to whip out your numbers on the fly will reflect much more favorably upon you than stumbling through a conversation which you are clearly not prepared for.
Choose your moment carefully
While most people begin talking about raises at the end of the year, this may not be the way to go. The final budget decisions may have already have been made by this point, and it’s likely that you won’t have much time to influence the final decision here if you wait until it’s time for annual reviews.
A great time to talk about a pay increase for your team is right after they’ve had a big win. If you’ve just had a successful project go over well and the higher-ups are in a good mood about how things went, then it might be a great time to talk money.
This win will still be fresh in their minds, and you can point to it during your argument and talk up your team with numbers that they’ll care about. You can bring this up by telling them that you want to talk about your team’s performance. If you’d like a soft entry point into the compensation discussion, then you could try first asking about where they think your team could improve. If things are going well, then you might head toward the main event. If things go south, then you can simply thank them for the feedback and have an easy out to re-strategize.
Have concrete goals in mind and set yourself up for success
Before you do anything, it’s important to think carefully about your goals. Since you’re opening up discussions for negotiation, you need to have an opening offer for your team as a whole. You should also have everything mapped out so you know how this sum would be broken down to individual team members.
Your offer should be reasonable based on competing salaries in your area, but don’t shoot too low either as they will likely not accept your first demand and you may need to negotiate down. You should firmly state your intentions rather than shakily beg your boss for a raise for your team.
You should also think about how you can set yourself up for a win before you even walk in the room. The negotiations should be the final battle, but before that, you should be doing your best to regularly impart your team’s accomplishments on higher-ups. Be sure to really sell their successes and inform management of your team’s valuable contributions during your regular meetings so that when it comes time for a raise, your boss already knows that you deserve one.
When constructing your game plan, don’t be afraid to draw everything out and practice what you’ll say, because this will make the negotiations much smoother, particularly if you’re not accustomed to making demands when it comes to your team’s pay raises. Try to envision any rebuttals that your boss might have to your plan, and then think about how you would address those remarks to further influence their decision in your favor.
Have the data to back up your demands
Going into a meeting with your bosses without solid data is a good way to lose out on an opportunity for your team. These people are likely far more experienced with negotiations than you, and you’ll need to have the facts clearly laid out if you want to succeed.
The first step to that is having accurate data to back up your points. Software engineering is something that most people outside of the field simply won’t understand. This likely includes upper management, because if they wanted to understand software engineering, then they wouldn’t pay you to do it. You have an obligation to your team to make your superiors understand how valuable they are and why they should be earning more money. You can do this by using performance-based metrics and real world stats with organized reports that can clearly state your case.
For example, software engineers who specialize in machine learning and data science are the most sought after currently. That allows them to demand the highest paychecks, and if you have any team members with these skills then that information could be very useful to you. Especially since you’ll be negotiating for a lump pay increase for your entire team as opposed to individually.
Bring solid arguments to the negotiating table
A solid argument does not consist of telling your boss that your team deserves more money. As harsh as it sounds, cost of living and similar arguments are the epitome of ‘not my problem’ scenarios to them. Your argument should instead inform them of what they have to lose if they do not offer bigger pay raises to your team.
Try relaying your concerns that the company is not as competitive as other employers, and that without a cost of living upgrade to salaries you fear that it may be difficult for the company to acquire quality software engineers. This technique is especially effective if you know that your particular area is low in qualified applicants and that it would be very difficult to find a qualified replacement should one of your team members leave for greater financial benefits elsewhere.
You could also tap into some statistics about the cost of replacing a valuable software engineer on your team should they feel compelled to switch jobs just to get a pay increase. This is language that corporate management can certainly understand because most of them are well aware that it can cost an exorbitant amount of money to recruit new engineers.
In fact, the cost to replace a developer could amount to a figure up to 1.5 to 2 times their annual salary. It’s important to keep in mind that the cost to replace a valuable employee doesn’t end at what they take home every month. There’s also the costs of recruiting, ramping up that employee and productivity lost from the time it takes to train them.
Last but not least, you should bring your own statistics into the fray. Don’t leave the negotiating table without selling your team and their accomplishments. Why are they the best at what they do? Why would the company be crazy to undervalue them?
Again, don’t try to blow smoke, instead, bring concrete data to the table on key metrics like efficiency, retention, and lead times, and don’t forget to upsell their other qualities too. Great leaders who also have technical skills are worth their weight in gold, and if you have some standout team members who are great under pressure, and support their team, then sing their praises and talk about their heroics. Bring hard evidence of this behavior to back it up and make the conversation objective.
You should also focus heavily on anything that they’ve done that has saved the company time and money. This could include idea generators on your team who have implemented improvements which have led to increased revenue, improved customer experience, or a reduction in overhead for the company.
The name of the game is to communicate what your team wants while instilling that they are in fact worth your asking price. However, you should also prepare for the reality that your boss could deny a raise for your team. If this happens, then your first action should be to take a deep breath.
While this is obviously disappointing, you can use this as a learning experience to better prepare for the next time that you go to bat for your team. Even a failed meeting will likely reveal ways that you can improve your negotiating skills or create leverage for next time.
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